Bitcoin (BTC) Elliott Wave Analysis: Sharp Decline Seen But Key Support Maintained

Bitcoin (BTC) exhibits dynamic price movements across different timeframes, reflecting evolving market sentiments and technical structures. This analysis delves into BTC’s higher time frame (daily) chart for comprehensive price analysis and its lower time frame (1-hour) chart for precise price predictions, incorporating key technical indicators.

BTC Price Analysis

Bitcoin’s daily chart showcases a strong bullish trend, recently culminating in a peak near $109,00. Post this peak, the asset entered a corrective wave, identified as wave 4 within a larger Elliott Wave structure. The correction aligns with classic Fibonacci retracement levels, highlighting potential support around $93,260 (0.236 Fib level).

Today’s low of $91,500 ended with a quick spike with the price currently sitting above $95,000 area. However, the day is still not over and the candle close is awaited. 

Bearish divergence observed on the Relative Strength Index (RSI) coincided with the price peak, suggesting weakening bullish momentum. The RSI’s decline from overbought levels supports the onset of this corrective phase. The 0.382 Fibonacci retracement at $85,512 and the 0.5 retracement near $79,250 emerge as crucial support zones, while deeper corrections could extend to $72,988 (0.618 Fib level).

Price action has formed a descending channel, indicating a potential continuation of the corrective trend. If the price breaches below $85,512, we may see further declines towards $79,250. Conversely, a bullish breakout above $97,155 could signal the resumption of the uptrend. The daily moving averages (50 and 200 EMA) converge, hinting at a decisive move soon.

Despite the corrective bias, maintaining support above $64,072 (0.786 retracement) sustains BTC’s long-term bullish structure but if the price goes that low, the bullish outlook will be highly unlikely. The price action within these levels will be instrumental in determining the continuation of the uptrend or deeper consolidation.

BTC Price Prediction

The 1-hour BTC chart reflects a sharper decline, unfolding an impulsive five-wave pattern to the downside. The price has breached $97,155 (1.0 Fibonacci extension), confirming bearish momentum, with wave (iii) targeting the 1.618 extension at $91,524.

If selling pressure persists, BTC could extend losses towards $88,043 (2.0 extension) and $85,565 (2.272 extension). However, potential retracements within corrective waves (iv) and (v) might temporarily uplift the price towards resistance at $97,155, serving as a critical pivot.

For bullish scenarios, a strong recovery above $97,155 could push BTC towards $102,500, targeting the 0.786 Fibonacci retracement of the prior decline. Confirmation of a reversal would require a decisive break above $105,784, invalidating the current bearish wave structure.

RSI on the 1-hour chart has dipped into oversold territory, suggesting a potential short-term bounce. A bullish divergence on the RSI could also hint at a reversal. Key moving averages (20 EMA and 50 EMA) are trending downward, reinforcing the bearish outlook unless a significant price reversal occurs.

A bullish reversal would require reclaiming $105,784, invalidating the bearish wave count. The RSI’s movement towards oversold levels could signal a near-term bottom, providing a potential reentry point for bullish traders.

Either way from its current levels we are expecting a bounce as the horizontal area served as strong support in the past. While we are primarily expecting this sideways move to be a corrective stage a confirmation will be seen from the strength of the bounce and conversly its weakness.

Key Levels to Watch:

• Immediate Resistance: $97,155 (1.0 Fibonacci extension)
• Key Support: $93,260 (0.236 Fibonacci retracement)
• Critical Support: $85,512 (0.382 Fibonacci retracement)
• Bearish Target: $85,565 (2.272 Fibonacci extension)
• Invalidation Zone: Above $105,784